Pharakhone v. Nissan North America

Opinion

5(&200(1'(' )25 )8//7(;7 38%/,&$7,21 3XUVXDQW WR 6L[WK &LUFXLW 5XOH   3KDUDNKRQHY1LVVDQ 1R (/(&7521,& &,7$7,21  )(' $SS 3 WK &LU 1RUWK$PHULFDHWDO )LOH 1DPH DS

$OH[DQGULD 9LUJLQLD /DUU\ * 7UDLO 75$,/  75$,/ 81,7('67$7(6&28572)$33($/6 0XUIUHHVERUR7HQQHVVHHIRU$SSHOOHHV

)257+(6,;7+&,5&8,7 BBBBBBBBBBBBBBBBB BBBBBBBBBBBBBBBBB 23,1,21 BBBBBBBBBBBBBBBBB

9,(1*6$021 3+$5$.+21( ; '$9,' $ 1(/621 &LUFXLW sXGJH  7KLV LV DQ DSSHDO 3ODLQWLII$SSHOODQW  IURPDQRUGHUJUDQWLQJVXPPDU\MXGJPHQWWRWKHGHIHQGDQWV  RQDFODLPWKDWWKH)DPLO\DQG0HGLFDO/HDYH$FW86&  1R ††HWVHTm)0/$l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n:LOOLDPs+D\QHVsU'LVWULFWsXGJH SURGXFWLRQ WHFKQLFLDQ DW DQ DXWRPRELOH SODQW RSHUDWHG E\ GHIHQGDQW 1LVVDQ 1RUWK $PHULFD ,QF 'HIHQGDQW 5RGQH\ $UJXHG0DUFK %DJJHWWZDV3KDUDNKRQHjVLPPHGLDWHVXSHUYLVRUDWWKHSODQW

'HFLGHGDQG)LOHG$SULO 0U 3KDUDNKRQH VD\V WKDW LQ ODWH 1RYHPEHU RU HDUO\ 'HFHPEHU RI  KH WROG 0U %DJJHWW WKDW KLV ZLIH ZDV %HIRUH1(/621&2/(DQG*,/0$1&LUFXLWsXGJHV H[SHFWHG WR JLYH ELUWK DW WKH HQG RI 'HFHPEHU DQG WKDW KH ZRXOGQHHGWRWDNHOHDYHWKHUHDIWHU3KDUDNKRQHVD\VKHWROG BBBBBBBBBBBBBBBBB %DJJHWWWKDWKHQHHGHGWLPHRIIERWKWRFDUHIRUKLVZLIHDQG EDE\ DQG WR KHOS PDQDJH D UHVWDXUDQW WKDW KLV ZLIH KDG &2816(/ UHFHQWO\SXUFKDVHG$OWKRXJK1LVVDQjVHPSOR\HHKDQGERRN FRQWDLQHGDSURYLVLRQSURKLELWLQJXQDXWKRUL]HGZRUNZKLOHRQ $5*8('sRVHSK+RZHOOsRKQVWRQ1DVKYLOOH7HQQHVVHH OHDYH3KDUDNKRQHVD\VWKDW%DJJHWWGLGQRWWHOOKLPKHFRXOG IRU$SSHOODQWsRQDWKDQ50RRN'L0852*,16%(5* QRWZRUNDWWKHUHVWDXUDQW 022.$OH[DQGULD9LUJLQLDIRU$SSHOOHHV21%5,() sRVHSK +RZHOO sRKQVWRQ 1DVKYLOOH 7HQQHVVHH :DGH 0U%DJJHWWGRHVQRWUHFDOODQ\FRQYHUVDWLRQRQWKLVVXEMHFW %RQKDP &RZDQ 1DVKYLOOH 7HQQHVVHH IRU $SSHOODQW LQ1RYHPEHURU'HFHPEHURI$FFRUGLQJWR%DJJHWWKH sRQDWKDQ 5 0RRN 'L0852 *,16%(5*  022. ILUVWOHDUQHGRI3KDUDNKRQHjVGHVLUHWRWDNHOHDYHGXULQJWKH

 1R 3KDUDNKRQHY1LVVDQ   3KDUDNKRQHY1LVVDQ 1R 1RUWK$PHULFDHWDO 1RUWK$PHULFDHWDO

ZHHN RI sDQXDU\    $W WKDW WLPH %DJJHWW VD\V KH 1RWZLWKVWDQGLQJWKLVZDUQLQJ0U3KDUDNKRQHZRUNHGDW DVNHG3KDUDNKRQHZKRZRXOGUXQWKHUHVWDXUDQWDIWHUWKHEDE\ WKHUHVWDXUDQWWKURXJKRXWKLVIRXUZHHNVRIOHDYH+HWHVWLILHG ZDVERUQ3KDUDNKRQHUHSOLHGWKDWKHZDVJRLQJWRPDQDJH ODWHUWKDWKHmKDGQRFKRLFHlEHFDXVHWKHUHZDVQRRQHHOVH WKHUHVWDXUDQWKLPVHOIZKHUHXSRQ%DJJHWWDOOHJHGO\mWROGKLP WRPDQDJHWKHUHVWDXUDQW1LVVDQGLVFRYHUHGWKDW3KDUDNKRQH KHFRXOGQRWl$OWKRXJK3KDUDNKRQHLVVDLGWRKDYHLQGLFDWHG ZDVZRUNLQJDQGDWWKHFRPSOHWLRQRIKLVOHDYHKHZDVILUHG WKDWKHXQGHUVWRRG%DJJHWWmIHOWOLNH>3KDUDNKRQH@ZDVJRLQJ IRUYLRODWLQJFRPSDQ\SROLF\ WRZRUNlDWWKHUHVWDXUDQWGHVSLWH1LVVDQjVSROLF\%HFDXVHKH mGLGQjWZDQWWRORVHl3KDUDNKRQH%DJJHWWODWHUWHVWLILHGKH 0U 3KDUDNKRQH VXHG 1LVVDQ DQG 0U %DJJHWW DVVHUWLQJ UHSRUWHG WKH FRQYHUVDWLRQ WR KLV VXSHUYLVRU 7KRPDV FODLPV IRU YLRODWLRQ RI WKH )0/$ DQG IRU QHJOLJHQW %XFKDQDQ DQG WR D KXPDQ UHVRXUFHV PDQDJHU sDPHV PLVUHSUHVHQWDWLRQ  7KH GHIHQGDQWV PRYHG IRU VXPPDU\ %RZOHV MXGJPHQW  7KH GLVWULFW FRXUW JUDQWHG WKH PRWLRQ DV WR WKH )0/$ FODLP FRQFOXGLQJ WKDW 1LVVDQ ZDV HQWLWOHG WR 0U3KDUDNKRQHjVFKLOGZDVERUQRQsDQXDU\WKH WHUPLQDWH3KDUDNKRQHjVHPSOR\PHQWEHFDXVHRIKLVKDYLQJ 0DUWLQ/XWKHU.LQJKROLGD\3KDUDNKRQHWHOHSKRQHG%DJJHWW ZRUNHGZKLOHRQOHDYH3KDUDNKRQHjVVWDWHODZFODLPZDV RQsDQXDU\LQIRUPHGKLPRIWKHELUWKDQGDVNHGIRUIRXU GLVPLVVHGZLWKRXWSUHMXGLFH7KLVDSSHDOIROORZHG ZHHNVRIOHDYH%DJJHWWDSSURYHGWKHUHTXHVW3KDUDNKRQH WKHQJDYH%DJJHWWWKHWHOHSKRQHQXPEHURIWKHUHVWDXUDQWDV ,, DSODFHZKHUHKHFRXOGEHUHDFKHG 7KHUH DUH VXEVWDQWLDO IDFWXDO GLVSXWHV LQ WKLV FDVH  0U 0U%DJJHWWWHOHSKRQHG0U3KDUDNKRQHDWWKHUHVWDXUDQW 3KDUDNKRQHVD\VWKDWKHWROG0U%DJJHWWQRODWHUWKDQWKH VHYHUDO KRXUV ODWHU  %DJJHWW KDV WHVWLILHG WKDW KH ZDV ILUVWZHHNRI'HFHPEHUWKDWKHZDQWHGWRWDNHOHDYH FRQFHUQHG DERXW 3KDUDNKRQHjV KDYLQJ JLYHQ KLP WKH DIWHUWKHELUWKRIKLVFKLOGIRUWKHSXUSRVHDPRQJRWKHUVRI UHVWDXUDQWjVQXPEHUVRKHFDOOHGWRUHPLQG3KDUDNKRQHWKDW ZRUNLQJ DW KLV ZLIHjV UHVWDXUDQW  3KDUDNKRQH VD\V WKDW ZRUNLQJ ZKLOH RQ OHDYH ZDV QRW SHUPLWWHG  $FFRUGLQJ WR %DJJHWW GLG QRW REMHFW  %DJJHWW VD\V KH GLG QRW OHDUQ RI 3KDUDNKRQH WKLV ZDV WKH ILUVW WLPH KH KDG EHHQ WROG WKDW 3KDUDNKRQHjV SODQ WR WDNH OHDYH IRU WKDW SXUSRVH XQWLO WKH 1LVVDQ SROLF\ ZRXOG SURKLELW KLP IURP ZRUNLQJ DW WKH ZHHNRIsDQXDU\ZKHUHXSRQKHLPPHGLDWHO\WROG UHVWDXUDQWZKLOHRQOHDYH3KDUDNKRQHWHOHSKRQHG%RZOHV 3KDUDNKRQHWKDW1LVVDQSROLF\SURKLELWHGZRUNLQJZKLOHRQ ZKRFRQILUPHGWKDW3KDUDNKRQHZDVQRWSHUPLWWHGWRZRUNDW OHDYH3KDUDNKRQHGHQLHVOHDUQLQJRIWKHSURKLELWLRQIURP WKHUHVWDXUDQW%RZOHVDOVRVHQW3KDUDNKRQHDPHPRUDQGXP %DJJHWW o RU IURP DQ\RQH HOVH IRU WKDW PDWWHU o XQWLO VWDWLQJWKDWm\RXDUHQRWDOORZHGWRSHUIRUPZRUNRIDQ\NLQG sDQXDU\WKHILUVWGD\RIKLVOHDYH ZLWKRXW SULRU DSSURYDO IURP WKH &RPSDQ\l  7KH PHPR ZDUQHGWKDWm>S@HUIRUPLQJXQDXWKRUL]HGZRUNZKLOHRQOHDYH 7KHTXHVWLRQZHPXVWGHFLGHLVZKHWKHUWKHIDFWVLQGLVSXWH ZLOOEHJURXQGVIRUWHUPLQDWLRQl DUHPDWHULDO6HH$QGHUVRQY/LEHUW\/REE\,QF86

  7KHUH ZDV HYLGHQFH WKDW WKH SUHYLRXV RZQHUV RI WKH UHVWDXUDQW KDG %XFKDQDQ DQG %RZOHV ERWK WHVWLILHG WKDW WKH\ PHW ZLWK 3KDUDNKRQH YROXQWHHUHG WR ILOO LQ ZKLOH 0UV 3KDUDNKRQH UHFRYHUHG IURP FKLOGELUWK GXULQJ WKH ZHHN RI sDQXDU\  WR UHLWHUDWH WKDW 1LVVDQ GLG QRW SHUPLW EXW WKDW 0U 3KDUDNKRQH KDG GHFOLQHG WKH RIIHU LQ WKH EHOLHI WKDW KH FRXOG XQDXWKRUL]HG ZRUN ZKLOH RQ OHDYH 3KDUDNKRQH KDV GHQLHG WKDW VXFK D GR WKH ZRUN KLPVHOI ZKLOH RQ OHDYH IURP 1LVVDQ 7KH SUHYLRXV RZQHUV PHHWLQJ RFFXUUHG WKHQ OHIW WKH FRXQWU\ IRU VHYHUDO ZHHNV 1R 3KDUDNKRQHY1LVVDQ   3KDUDNKRQHY1LVVDQ 1R 1RUWK$PHULFDHWDO 1RUWK$PHULFDHWDO

QRWLQJWKDW5XOHF)HG5&LY3 GHFLVLRQWRGLVFKDUJHKLPoKHFDQQRWVKRZDYLRODWLRQRIWKH UHTXLUHVDJHQXLQHLVVXHRIPDWHULDOIDFWWRGHIHDWVXPPDU\ )0/$6HHLG%DFKHOGHUY$PHULFD:HVW$LUOLQHV,QF MXGJPHQWm>7@KHVXEVWDQWLYHODZZLOOLGHQWLI\ZKLFKIDFWV )GWK&LU DUHPDWHULDOl,GDW,IXQGHUWKHJRYHUQLQJODZWKH RXWFRPH ZRXOG EH WKH VDPH UHJDUGOHVV RI KRZ D IDFWXDO 7KH UHFRUG EHIRUH XV DGPLWV RI RQO\ RQH DQVZHU WR WKH GLVSXWH LV UHVROYHG WKH GLVSXWH LV QR EDU WR VXPPDU\ TXHVWLRQZK\0U3KDUDNKRQHORVWKLVMRE,WLVXQGLVSXWHG MXGJPHQW  6HH LG  $QG ZH DUH VDWLVILHG WKDW 0U WKDW 1LVVDQ KDG D GRFXPHQWHG SROLF\ SURKLELWLQJ 3KDUDNKRQHjV )0/$ FODLP ZRXOG KDYH WR EH GHFLGHG WKH mXQDXWKRUL]HGZRUNIRUSHUVRQDOJDLQZKLOHRQOHDYHl,WLV VDPHZD\QRPDWWHUZKRVHYHUVLRQRIWKHIDFWVLVDFFHSWHG OLNHZLVHXQGLVSXWHGWKDWRQWKHILUVWGD\RI0U3KDUDNKRQHjV OHDYHERWK0U%DJJHWWDQG0U%RZOHVDGYLVHGKLPWKDWKH 7KH)0/$PDNHVLWXQODZIXOIRUDQHPSOR\HUWRmLQWHUIHUH ZDV QRW SHUPLWWHG WR ZRUN DW KLV ZLIHjV UHVWDXUDQW  0U ZLWKUHVWUDLQRUGHQ\WKHH[HUFLVHRIlFHUWDLQULJKWVFUHDWHG 3KDUDNKRQH QHYHUWKHOHVV HOHFWHG WR ZRUN DW WKH UHVWDXUDQW E\ WKH VWDWXWH   86& † D   $PRQJ WKHVH WKURXJKRXWKLVOHDYH+DYLQJGLVFRYHUHGWKDW3KDUDNKRQHZDV VWDWXWRU\ULJKWVLVWKDWRIDQHOLJLEOHHPSOR\HHWRWDNHXSWR YLRODWLQJFRPSDQ\SROLF\1LVVDQILUHGKLPoDQGWKHUHLVQR ZHHNVRIOHDYHm>E@HFDXVHRIWKHELUWKRIDVRQRUGDXJKWHURI HYLGHQFH WKDW LW KDG DQ XOWHULRU PRWLYH IRU GRLQJ VR  7KH WKHHPSOR\HHDQGLQRUGHUWRFDUHIRUVXFKVRQRUGDXJKWHUl XQGLVSXWHG HYLGHQFH WKXV FRPSHOV D ILQGLQJ WKDW 0U $FRQFRPLWDQWULJKW LVWKDWRIDQHPSOR\HHZKRKDVWDNHQ 3KDUDNKRQHZDVGLVFKDUJHGEHFDXVHKHYLRODWHG1LVVDQjVQR )0/$OHDYHmWREHUHVWRUHGE\WKHHPSOR\HUWRWKHSRVLWLRQ ZRUNSROLF\DQGQRWEHFDXVHKHWRRN)0/$OHDYH RI HPSOR\PHQW KHOG E\ WKH HPSOR\HH ZKHQ WKH OHDYH FRPPHQFHGl86&††D  $D  $ 0U3KDUDNKRQHDUJXHVWKDWWKHGLVFUHSDQF\EHWZHHQKLV WHVWLPRQ\ DQG 0U %DJJHWWjV LV PDWHULDO EHFDXVH XQGHU KLV m7KHULJKWWRUHLQVWDWHPHQW>XQGHUWKH)0/$@LVQRW YHUVLRQRIWKHIDFWVoEXWQRWXQGHU%DJJHWWjVo1LVVDQZRXOG DEVROXWHl.RKOVY%HYHUO\(QWHUSULVHV:LVFRQVLQ,QF EHHTXLWDEO\HVWRSSHGIURPUHO\LQJRQLWVQRZRUNSROLF\DV )G   WK &LU   $Q HPSOR\HU QHHG QRW D EDVLV IRU GLVFKDUJLQJ KLP  ,Q WKLV FRQQHFWLRQ 0U UHLQVWDWHDQHPSOR\HHZKRZRXOGKDYHORVWKLVMREHYHQLIKH 3KDUDNKRQHPDLQWDLQVWKDW0U%DJJHWWjVVLOHQFHLQ'HFHPEHU KDGQRWWDNHQ)0/$OHDYH6HH86&†D  % RIDPRXQWHGWRWDFLWDSSURYDORI3KDUDNKRQHjVSODQWR  &)5 †  .RKOV  )G DW   $QG DQ ZRUNDWWKHUHVWDXUDQWZKLOHRQOHDYH3KDUDNKRQHFODLPVWR HPSOR\HUQHHGQRWUHLQVWDWHDQHPSOR\HHLIDSSOLFDWLRQRImD KDYHUHOLHGRQWKDWDSSURYDOWRKLVGHWULPHQW XQLIRUPO\DSSOLHGSROLF\JRYHUQLQJRXWVLGHRUVXSSOHPHQWDO HPSOR\PHQWloLHDUXOHDJDLQVWZRUNLQJZKLOHRQOHDYHo 1LVVDQDUJXHVWKDWWKHHVWRSSHOFODLPKDVEHHQZDLYHG%H UHVXOWVLQWKHHPSOR\HHjVGLVFKDUJH&)5†K WKDWDVLWPD\LWVHHPVWRXVWKDWWKHFODLPLVLQWHUWZLQHGZLWK VHH6HSHY0F'RQQHOO'RXJODV&RUS)G WKHVWDWHODZFODLPIRUQHJOLJHQWPLVUHSUHVHQWDWLRQoDFODLP WK&LUFHUWGHQLHG86 WKDW ZDV SURSHUO\ GLVPLVVHG ZLWKRXW SUHMXGLFH  0U 3KDUDNKRQHjV WHVWLPRQ\ GHPRQVWUDWHV DW PRVW WKDW 0U ,WIROORZVIURPWKLVWKDWmZKHWKHUDQHPSOR\HUYLRODWHVWKH %DJJHWWjV VLOHQFH OHG KLP WR GHFOLQH DVVLVWDQFH WKDW ODWHU )0/$ WXUQV RQ ZK\ WKH HPSOR\HH ZDV QRW UHLQVWDWHGl WXUQHGRXWWREHQHFHVVDU\:KHWKHUWKLVLVVXIILFLHQWWRUDLVH .RKOV)GDW,IWKHHPSOR\HHFDQQRWVKRZWKDWKH DMXU\LVVXHRQKLVVWDWHODZFODLPLVQRWIRUXVWRVD\:KDW ZDVGLVFKDUJHGEHFDXVHKHWRRNOHDYHoRUDWOHDVWWKDWKLV ZHGRVD\KRZHYHULVWKDWWKH)0/$LQRXURSLQLRQZDV WDNLQJ RI OHDYH ZDV D mQHJDWLYH IDFWRUl LQ WKH HPSOR\HUjV QRWGHVLJQHGWRDIIRUGUHOLHILQVXFKDVLWXDWLRQ7RSUHYDLORQ 1R 3KDUDNKRQHY1LVVDQ  1RUWK$PHULFDHWDO

KLV )0/$ FODLP 0U 3KDUDNKRQH ZRXOG KDYH KDG WR GHPRQVWUDWHWKDWKLVWDNLQJRIOHDYHZDVDmQHJDWLYHIDFWRUl LQ1LVVDQjVGHFLVLRQWRGLVFKDUJHKLP7KLVKHKDVQRWGRQH oDQGQRQHRIWKHGLVSXWHGIDFWVFDQDVVLVWKLPLQGRLQJVR $)),50('